Disclaimer: Some postings contain other author's material. All such material is used here for fair use and discussion purposes.

Friday, March 22, 2013

The complex tax system is just fine - FB conversation

FB friend BR posted this:

HOLY SHIT.

2011 tax return: I owed over $10,000, freaked out, and started paying $1,400 per month to get back to zero. Looks like that was overkill.

2012 tax return: I'm getting back $4,700, which clears all IRS debt, ends over $700 of monthly payments, and gives us a $1200 from Uncle Sam.

C'mon America, let's get a bucket of BBQ and get busy.

F.B.: Woot. I feel ya, I received a great return this year. Paid off my car and got some new equipment. I love it when it works out!

G.S.: I got $48 back...seriously, working full-time, hahaha!

B.J.: Get a better accountant.

G.S.: I actually did it two different ways, went to the United Way tax prep experts and checked it online with a lot of different calculators. I'm not quite poor enough to qualify for any EIC and I am single with no sizable deductions, my charitable donations don't count either because they amount to less than a certain percentage of my income, and blah blah blah. Not complaining really, I'd look into it but my income/finances are pretty damn simple and I don't think there's really any other angle to work., haha!

Me: B.R.,  I think you know what I'm going to say...

B.R.: Rich - say it anyway!

K.E.: Hurray for the IRS and the Federal Government. The federal tax system makes so much sense :-/

Me: Awwwww.... ok. There is no way in God's green earth that an average, middle class, law-abiding regular guy should be placed into a position of worrying about what the government is going to do to them, especially when we're talking on a magnitude of tens of thousands of dollars. It's just nuts that we tolerate this tinkering with the tax code so that even the government itself doesn't know who is breaking the law. What are we, trained circus animals jumping through hoops as we do government's bidding, paying attention every day to whether something is tax deductible? No rational person would acquiesce to this nonsense.

J.R.: Congratulations, B.R.! I'm assuming your post was a celebration of accomplishment and good news. And not, say, a case study intended to assert the correctness of your political dogma.

Me: Um, yeah officer. I'm not trespassing, I was given a door key by the owner.

D.G.: So first off, congrats! Now allow me to go all nerd on your asses. ;)

G.S. --getting a small refund is a good thing! It means that you didn't overpay. If you get a refund, it means that you gave Uncle Sam an interest-free loan for the year. On behalf of all other taxpayers--thank you, but you really shouldn't have.

Ben--as you've probably figured out by now :), this is why self-employed folks should estimate their taxes at least every quarter, even if they're not required to pay quarterly.

Okay, here endeth the lecture. Let us return to squanderous merry-making. How many bottles of absinthe does $1200 buy?

B.R.: yes I know, I overpaid in my 2012 estimated quarterly payments. But when my 2011 taxes ended up costing me money I should have been saving but didn't, my CPA suggested that I over-prepare for 2012. I knew I was getting something back, I just didn't expect so much.

Rich - I expected a response and I prepared a retort:

Living in American culture means making a big compromise. Not a sacrifice. A compromise. I get an incredible infrastructure in which I feel safe, healthy, and confident to follow my path. The things I do to make my money would not be possible without this infrastructure, nor would my fantastic standard of living. All of that infrastructure costs money, and that money is taken out in my taxes. I understand that there's some bullshit that gets paid for with my taxes, but that too is a compromise. I get (in part) to support awesome things like Obamacare, 9-11, public schools, Title IX, and access to contraceptives. But I also am forced to support shitty things like war, wire-tapping, the salaries of people who actively hate women, and bailouts of businessmen who should be in prison. I'M REALLY REALLY PISSED OFF that my taxes support those shitty shitty things. But I'm also incredibly grateful, not only for the infrastructure and all those awesome things I listed, but also that I get to live in a culture where everyone thinks differently and is free to speak up about it. PAYING MY TAXES is a great compromise that I make with the American government, every single day. If I don't want to make that compromise, I have three choices: work to change the system, live illegally, or leave America.

Taxes are not the enemy. If you really need an enemy, to constantly be fighting against yet always losing to, choose Money. Money is a much bigger asshole than Taxes.

Me: Do I need J.R.'s  permission to respond? 

I never mentioned paying taxes, which I am happy to do. I only commented on the insane tax system.

B.R.: You do not need J.R.'s permission. Haha I wasn't actually responding directly to your message, I just wanted to swap soapbox moments with ya. Except that my message, which I hope you considered thoroughly, very clearly indicates that I AM quite willing to acquiesce. That said, fixing the tax system would hopefully mean more money for me, so by all means, would you please tell me how you think the tax system needs to be fixed?

Me: It can't be fixed. Too far gone.

B.R.: Bullshit.

Me: Whatever.

B.R.: Look, though I have liberal views on many things, I'm a centrist, because I like to see progress being made. The notion that NOTHING can be done to make our tax code work more efficiently or more fairly make ZERO sense to me. That said, I don't know much of anything about our tax code, so while you can simply rag on it if you wish, I'm giving you the opportunity to fill this currently empty chamber of my head with your perspective. What realistic and pragmatic changes would make our tax system better?

Me: The idea that "fixing" the tax system means yet another layer of exemptions, credits, surcharges, and social engineering efforts is offensive to me.

The purpose of taxes is to raise the revenue needed to operate government. However, the tax code is being used to change societal outcomes. The tax code encourages marriage, home ownership, charity, and a lot of other "good" things that are outside the purpose of taxation. But it also encourages tax avoidance, outsourcing, and financial manipulation.

It's so complex, to the point of nonsensical, that it forces the people to live their lives continually cognisant of how their actions might impact their taxes. It forces the people to serve government. I happen to believe that government should barely register on the daily radar of peoples' lives.

In my rainbows and pink unicorn world, the ideal scenario is a repeal of the 16th amendment, the elimination of property taxes, and the implementation of a constitutionally limited flat retail sales tax. The reasons? 1) an income tax is a tax on productivity, which takes a part of a person's labor. Philisophically speaking, you are working for the benefit of government and not yourself, which is a violation of property rights. 2) Taxes on property, that is, fixed, unproductive, and unmoving assets means that inactive objects, things that have nothing to do with economic activity, are being taxed. 3) a retail sales tax is a tax on economic activity, which means things are happening, products are moving, and money is changing hands. That makes those taxes voluntary on some level. And it is progressive, in that rich people buy more expensive things, so they get taxed more.

I realize that for many left-of-center people, paying taxes is a noble, almost holy act. But for a lot of other people, it is invasive. Put it this way. Would you accept a government that dealt with the most intimate details of your sex life in the same way the it deals with your financial life?

B.R.: YES! Thank you for these thoughts. No, I wouldn't accept that kind of government, but my sex life is private in both practice and awareness, whereas my financial life involves thousands of people and multiple levels of awareness by each participant. But, philosophically, I get what you mean. I can see clearly how you believe the system would need serious uprooting to do any good, and that tinkering with it as is would seem arbitrary and not progressive. I don't believe taxes are either a form of forced labor OR a noble holy act. If many left-of-center (love this term) Americans are like me, they just don't view their money as an extension of themselves, as something that gets personified with each transaction. I view it as a resource that comes and goes based on personal choices and external conditions, and should be made fair in as many ways as possible. Thanks again for your perspective.

Me: How does your finances involve thousands of other people?

B.R.: I buy and sell things. I bank. I invest. The internal details of my finances are private, but even those are known by any staff member at BECU. My point was that whereas my sex life is private in both practice and awareness, my financial life is not so private.

Me: If your sex life involved thousands of people, would that justify the promulgation of its awareness?

B.R.: Are we still talking about taxes? Lol. My sexual interactions are a form of exotic communion. There are not many more effective ways to physically interact with the realm of the spirits. Sex is the one of the most vulnerable offerings one can give to another. Money is money.

Me: It sounded to me like you were justifying the invasion of your finances because of its more public nature. I simply applied that criteria to your sex life. To me, my finances ought to be as private and inviolate as my sex life. If I choose to draw those boundaries like that, they are mine alone to draw. My finances are an extension of myself, since they represent the sweat of my brow. "That which is mine" precludes anyone elses' asserted interests, whether it be sex, money, or my toothbrush.

B.R.: I can see the value in that. But that would mean you don't get to receive anything that your taxes pay for. Are you WILLING to do that, regardless of the illegality of such reclusion?

Me: Remember, I specified the nature of my preference regarding taxation. I did not eliminate all taxation, only taxation that confiscates productivity.

As far as illegality, if the law said that gay sex was criminal, do you think that everyone should obey that law?


No comments:

Post a Comment